AMD stems the bleeding in Q3

AMD posted revenues of $1.78bn for the third quarter of 2008, up 14 per cent on 2007, and made a net loss $67m - a massive improvement on the $1.19bn it lost in the second quarter.

But the soon-to-be ex-chipmaker warned of concerns looking forward. It expects no increase in revenue for the fourth quarter.

According to CEO Dirk Meyer, consumer spending was softer in September in US and Western Europe and even down slightly in China. Enterprise spending has been weak all year with no substantial change in the quarter, he said.

Units for both laptops and servers were up and the results impressed the markets - AMD shares rose in after hours trading on the news.

The company also added some more detail to its decision to go fabless. AMD announced last week that it would split itself into two companies - one to manufacture the chips and one to design them. The move should allow the company to avoid the massive capital investment in building fabs - a process which has got a lot more expensive with the current credit crisis.

Meyer said AMD was "on a path to being the company we aspire to be".

The company will look closely and learn from how ATI functions without manufacturing, he said. And he noted the requirement to formalise arrangements between research and manufacturing that was unnecessary when it is all within one company.